Maximise your Avios, air miles and hotel points

What I learned when I met all the big players in UK travel credit cards

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I spent Tuesday at a conference in London focussed on travel loyalty credit cards.  Whilst I don’t like taking a day out of my schedule, I felt it would be good to get a feel for how the industry is responding to the EU-imposed fee cuts.

It was a fun event and I was impressed by how many of the delegates read this site.  Hi to Lauren, Jason, Nauman, Sanam, Katie, Tibor, David and many others.

UK Rewards credit and charge cards

I have done my best to sum up what I discovered in the bullet points below:

There appears to be a challenge to Amex’s view that the British Airways card is exempt from the 0.3% fee cap.  If you have read our previous articles on the new EU rules, you will know that directly issued Amex cards are exempt.  It seems that poorly worded legislation may mean that, whilst the BA card was never meant to be included (as it is directly issued by Amex) it may get dragged in.  This is linked to BA’s role in the process which means that the card is not strictly vertically integrated.

Travel loyalty cards remain hugely attractive for issuers.  Bad debt is very low.  Monthly spend is high.  Whilst very few people pay interest, those that do are paying it on large balances.

70% of co-branded credit cards are issued by retailers (M&S, Tesco, John Lewis, House of Fraser etc).  The travel segment is smaller than you imagine.

US research shows that the average spend on a co-branded credit card is 3x higher than the average spend on a ‘no rewards’ credit card.

48% of people in a recent survey felt that earning points was more valuable than earning cash via a cashback credit card

The EU fee cap is a seismic change for the industry.  However, the holders of travel loyalty cards are smart and look for value – simply slashing the rewards is not a viable strategy.

The loss of revenue will be partially clawed back from annual fees and a greater push to generate fees from, for example, balance transfers.

The way forward will involve the airlines and hotels investing more in their co-brand cards.  Getting their brand in your wallet drives loyalty and brand visibility – some of the value from this should be passed back.

With more loyalty cards requiring annual fees, the airlines and hotels will need to start giving back more in benefits.  IHG is leading the way here with Gold and Platinum status in IHG Rewards Club.  Perhaps we may see BA Bronze or Virgin Silver status given out with their premium (high fee) credit cards?

In terms of what the future holds, there were three interesting ideas I heard about:

Creating a new UK domestic payment scheme.  Many countries have their own domestic payment schemes which compete with Visa and MasterCard.  Carte Bancaire is very successful in France.  Turkey and Canada have major schemes.  Even Bulgaria and Serbia have them.  Such a scheme could be exempt from the new EU legislation.  They usually involve a JV with Visa or MasterCard to allow the card to be accepted abroad.

Creating a private credit card.  In the US, American Airlines issues a credit card which can ONLY be used for purchases with AA.  It is not branded Visa / MasterCard etc.  I doubt BA could make this work in the UK but potentially a coalition of major supermarkets, garages and travel companies could launch their own card network.

Apple Pay and Google Pay will play a major role going forward.  They are a threat – if you load your BA Amex details to Apple Pay then you don’t ‘see’ the card when you use it and the brand visibility is lost.  They are also an opportunity – Apple Pay could use Avios as a direct incentive to use its platform, or could re-sell them to merchants who would award them to customers who use Apple Pay.  

(My personal view is that it is logical for Apple and Google to launch their own credit cards and possibly even payment networks.  It would, for a start, be a good way of putting their excessive amounts of surplus cash to use.)

As you can see, there is a lot going on.  You should expect more big changes to your favourite travel credit card over the next year.

PS.  I also believe I know why the Marriott credit card has been temporarily suspended for new applications.  This link lists everyone called Marriott who has applied for, and received, permission from the Financial Conduct Authority to promote credit cards in the UK.  Guess who is not there?  Did they forget to get a licence?  Compare that to Hilton, IHG, British Airways etc.


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You qualify for the bonus on these cards even if you have a British Airways American Express card:

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You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.

American Express Preferred Rewards Gold

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British Airways American Express Premium Plus

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The Platinum Card from American Express

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Capital on Tap Business Rewards Visa

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Comments (118)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Grant says:

    Hi All – first time post but have something worthwhile to share here 🙂

    Apple Pay:-
    1. There is no actual limit – Apple have done a terrible job marketing this but the £30 contactless limit has NOTHING to do with Apple – in fact Apple Pay is limitless unless the retailer for whatever reason decides to cap it. That’s actually really important because it does mean you can use for ANYTHING once it breaks into enough retailers.

    2. Apple have NO INTENTION of creating “Apple Bank” or their own merchant network. They looked at it and qualified it out very early on – Apple Pay was created by them to ensure people keep using their phone. They just want people to have their phone in their hand for whatever reason.

    Hope that helps in some way

    • Matt says:

      In regards to your Apple pay points.

      1. Correct there is no limit set by Apple pay, however Apple pay is a contact-less transaction and the standard limit is £30 (set by Visa and MasterCard). However there is something called High Value Contactless, which when implemented allows devices such as iPhone with ApplePay or in the Android/SamsungPay etc to allow for transactions with no limit – this only works with phone with verification of some kind (thumb verification) and not with standard contactless cards. What adds complexity is that each merchant needs to implement this with their Payment Service Provider. Pret a Manger has implemented High Value Contactless with their PSP hence why there is no limit in their stores.

    • Alastair says:

      Indeed. I bought a new iPhone in the States and jokingly said ‘can I pay with my Apple watch?’ Sure enough, a quick wave of the assistant’s terminal and $800 later I had the phone in my hand. Was almost a little scary.

      I have noticed though that most times I use it, the terminal does dial up and authorise the transaction, even if it takes just a couple of seconds on a newer machine – unlike when using the card which doesn’t authorise it, which would definitely fit in with what Matt describes.

      • Matt says:

        Yes – for a higher value amount it will have to dial the bank to check you have the funds.

      • Talay says:

        It isn’t the newer machine which speeds it up but rather a connection through an Ethernet cable to fast broadband versus a PSTN telephone call.

        In my retail outlets, the time difference is (relatively) huge at about 1 or 2 seconds via Ethernet and 10 to 15 seconds via PSTN.

  • Singing Dwarf says:

    Rob – for the purposes of the FCA registration, is a website classed as ‘trade premises’ !?!

    • Rob says:

      Honestly can’t remember which box I ticked! The whole thing is bizarre though. I need a licence to link to, say, the Virgin website card page. Virgin also has to have a licence in order to link to the MBNA page. Effectively, you need to be licensed to introduce someone to an introducer.

  • Metatone says:

    I’m a corner case, but I’d certainly pay an increased fee for a BA card that came with Bronze.
    My business flying just doesn’t suit the new BA system, so it would be nice to have another route to quicker check-in. (I’m not really a lounge person most of the time.)

  • Matt says:

    Card issuers definitely want to move away from co-brands there is limited value in doing co-brands due to the interchange caps.

    I always like to use AMEX for the rewards but AMEX could get pulled into the Interchange caps in the near future and this would harm their value proposition. AMEX already charges fees for some cards and if they are capped at 0.3% instead of charging whatever they negotiate today (1.5-3%) then this will cause big issues which an increase in fees would not overcome easily.

  • Guesswho2000 says:

    Good luck actually getting the referral emails to turn up, I must have tried about twenty times, but they never arrive!

    • Rob says:

      Lloyds tries to identify you from the email address. If you have ANY connection to the bank, including having ever had an account, your referral request is deleted without telling you. This is why the emails take 5 days to arrive.

      Some ISPs also delete the emails because the heading says ‘Rob has a secret to share with you’ which it sees as spam and trashes it before it even gets to your inbox.

      • Wally1976 says:

        Rob, are you saying that you can’t refer someone who already has other accounts with Lloyds? That’s not in the terms.

        • Rob says:

          I know it isn’t in the terms – but that is the case.

          Not just someone who has other accounts with Lloyds. Someone who has EVER had an account with Lloyds and linked the same email to it. They also appear to include Halifax in this.

          What do you think they do for 5 days? What throws me is that I cannot believe it is cost effective to pay people to go through their database like this.

        • AndyR says:

          I think it just the email address they check as I have a Lloyds current account and previously had the old Lloyds Airmiles cards and I got referred ok.

    • Guesswho2000 says:

      That’s interesting, as I have an account with TSB, but this was only opened in the last year, but have never in my life held an account or credit card with Lloyds or Lloyds TSB – my OH has a long dormant Lloyds account. she’s my referral, but theres pretty much no chance they’d link the two, unless their systems are more advanced than we think, its an ancient account, and has been dormant since before I even knew her!

      • Guesswho2000 says:

        Oh, and email addresses wouldn’t have matched, we use one of my email addresses for these sort of things, to minimise the amount of effort she has to put in – I can just about get her to spare an hour a month for cancellation calls!

    • Alan says:

      Same issue here – doesn’t seem to want to send anything through!

      Anyone know an alternate way to do referrals for this card?

  • The_Real_A says:

    Nice article Rob – i assume most of your readership are interested in the business aspect of the industries that are related to our points use.

    I wonder how big a userbase Rob would need to launch his own credit card? 🙂

    • Matt says:

      There are still a lot of smaller issuers trying to run co-brand cards but the economics of it really isn’t good. You can see the Owls card offers a 9 month interest free on season ticket purchase but nothing much else, therefore there is limited benefit to enroll into this card, especially as some issues over 2 years or more interest free. I doubt there is much benefit to SWFC in promoting this card… Also don’t forget the interchange cap only came into play on 9th December, so much of the negative impact will not yet have been seen.

      • The_Real_A says:

        I think what we miss is the high net worth of the “points” collecting demographic. An annual fee provided it gave value is not the barrier it is in the general population. An app based solution without the traditional call centeres is very cheap indeed. Monese set up a pan european “bank” for less than £500k – a CC/charge card setup along side this operation could be operated for peanuts.

  • Nathan says:

    Off topic in afraid but when you next meet or talk to Daniel from propeller travel can you feedback my disappointment in the time it’s taken to get any reply from them. I emailed them a few days ago and heard nothing back, chased the next day, still nothing, tried calling only to get the message to email them and filled out the online form and still heard nothing.
    For a travel company who may get requests for last minute bookings, it’s really very poor.

    • Jason says:

      I emailed them 2 days ago and haven’t had a reply. I’m not chasing it.

      • Nathan says:

        Its really poor to be honest! I have 2 hotels I’m looking to book through them but not getting any reply! Sadly the added benefit of booking SPG through them is worth it but I’m really not impressed with them this time round.

        • Pol says:

          I had a similar problem with propeller so I headed over to flyertalk and found a US based guy. He always answers within 24 hours, usually much quicker. So far used him for an SPG luxury privileges booking in Paris, a booking in DC and a house rental in Barbados. Very happy with his service.

    • Waribai says:

      Didn’t he have some big problem with ex EU tickets and BA chasing him for ‘fraud’?

  • Adam says:

    Sorry for O/T. Looking at applying for a BA Prem Amex before the 25K promo cut off date but currently hold a Lloyds Avios basic. Am I likely to get the bonus; has anyone been in the same position and applied in the last couple of months?

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